Ways and Means Committee Chairman Dave Camp (R-MI) has released draft of the “Tax Reform Act of 2014,” which he says will spur stronger economic growth, greater job creation and put more money in the pockets of taxpaying Americans. Camp’s goal is to fix America’s broken tax code by lowering tax rates and making tax policy simpler and fairer for families.
Based on analysis by the independent, non-partisan Joint Committee on Taxation (JCT), without increasing the budget deficit, the Tax Reform Act of 2014:
- Create up to 1.8 million new private sector jobs.
- Allow roughly 95 percent of filers to get the lowest possible tax rate by simply claiming the standard deduction (no more need to itemize and track receipts).
- Strengthen the economy and increases Gross Domestic Product (GDP) by up to $3.4 trillion (the equivalent of 20 percent of today’s economy).
Using data provided by JCT, Camp says the average middle-class family of four could have an extra $1,300 per year in its pocket from the combination of lower tax rates in the plan and higher wages due to a stronger economy.
“It is no secret that Americans are struggling. Far too many families haven’t seen a pay raise in years. Many have lost hope and stopped looking for a job. And too many kids coming out of college are buried under a mountain of debt and have few prospects for a good-paying career,” said Camp about the need to fix America’s broken tax code. “We’ve already lost a decade, and before we lose a generation, Washington needs to wake up to this reality and start offering concrete solutions and debating real policies that strengthen the economy and help hardworking taxpayers. Tax reform is one way we can do that.”
The tax code would also affect energy companies including those who are developing and providing renewable energy. In response to the draft proposal, Brooke Coleman, Executive Director of the Advanced Ethanol Council (AEC), said, “While the draft plan falls well short of the goal of ensuring that the multi-trillion dollar global clean energy sector sets up shop in the United States, Chairman Camp should be commended for taking tough positions on many of the most distortive oil and gas subsidies in the federal tax code.”
“Inequitable provisions like percentage depletion, last-in/first-out (LIFO) and various incentives for the production of marginal oil and gas distort investment decision-making and drive capital away from renewable fuels,” continued Coleman. “Chairman Camp is right to point out that only extractive industries are allowed to recover more than their investment under current percentage depletion and depreciation rules. Doing away with these provisions will do little to dissuade oil and gas investment given the magnitude of the opportunity, but will help level the playing field when it comes to investments in next generation fuels of all types.”
Coleman concluded that while AEC is not supportive of the proposal’s treatment of the emerging cellulosic and advanced ethanol industry, they are looking to working with the Committee to ensure the U.S. is in the best position to develop new technologies and commercials clean energy on American soil.